The killing of Osama bin Laden ignited President Obama’s voter approval
ratings, but that doesn’t guarantee his reelection in 2012.

Barring an unforeseen but high-profile foreign-policy failure, the elimination of America’s Public Enemy No. 1 will neutralize any Republican suggestion that the president is weak on national security.

{mosads}But this only underscores the fact that 2012 will be all about the economy and jobs — and there, the president is deeply vulnerable.

The private sector added an impressive 268,000 jobs in April, but the jobless rate increased from 8.8 percent to 9 percent. No sitting president since Franklin Delano Roosevelt has won reelection with unemployment as high as 8 percent.

Obama is likely to be asking voters for a second term with the joblessness rate at least that high, experts say.

Moody’s Economy.com forecasts 8 percent unemployment at the end of 2012, falling to 7.7 percent in early 2013, said Heidi Shierholz, a labor market economist at the Economic Policy Institute.

Obama will “probably” face 8 percent unemployment, and if it’s lower than that, “it won’t be by much,” she added.

White House officials remember clearly how the 2008 economic collapse changed the dynamic of that presidential race in their favor. In light of that and present economic difficulties, they seek solace in the experience of former president Reagan.

The Gipper’s poll numbers plunged with the economy in his first two years in office, and Republicans suffered midterm losses in 1982. But the economy bounced back and Reagan won a landslide in 1984.

Obama’s team is looking to avoid the fates of former Presidents Carter and George H.W. Bush, whose reelection bids were spoiled by recession. Bush’s defeat despite resounding victory in the first Gulf War suggests that battlefield triumphs might not allay the corrosive effect of a rotten economy.

Still, the White House has reason to feel confident. The commander in chief looked decisive and effective in sending the Navy SEALs on their brilliant mission to get bin Laden.

And even before that matchless national security victory, Obama has accumulated a list of accomplishments to tout to different audiences, even if many remain controversial; healthcare reform and the repeal of the military’s “Don’t ask, don’t tell” policy lead the list for liberals, while extending Bush-era tax rates and a new posture of fiscal rectitude will be emphasized to independent voters.

In addition, Obama has been blessed with an apparently weak field of Republican challengers. Mississippi Gov. Haley Barbour, Sen. John Thune (S.D.) and Rep. Mike Pence (Ind.) have already decided not to run.
If the economy turns around for Obama, many will see him as a shoo-in for reelection.

But his campaign isn’t kicking back and relaxing. “If you want proof that our campaign will not take any vote for granted, look at the groundwork our volunteers and staff are laying in the states,” said one campaign official.

“They’re organizing conversations in their communities with neighbors and friends about the president’s efforts to continue economic growth and put this country on a path of living within its means while still investing in a brighter future for our kids.” Neighborhoods, prosperity, thrift and children — check, check, check and check.

Friday’s jobs report helps, too. Private-sector gains were higher than expected following 1.8 percent growth in first-quarter gross domestic product.

The job number suggests businesses shrugged off high gas prices and economic doubt and continued a trend in hiring.

The Federal Reserve expects 3.1 to 3.3 percent growth this year. To get there will require 3.5 percent growth from now on, which would add hundreds of thousands of people to payrolls.

The Fed’s projections match those by Moody’s Analytics chief economist Mark Zandi. “I’m hopeful that oil prices are peaking and that strong corporate earnings will convince businesses to step up their hiring this summer and fall,” Zandi said in an email. “The economy needs consistent 200k plus monthly job gains to feel confident that the economy is off and running.”

Oil prices dropped 9 percent on Thursday, reflecting falling confidence in the economy. But it should also mean lower gas prices, which could help a president hurt by high prices at the pump.

The administration is frustrated by corporations sitting on trillions of uninvested dollars and hopes the money will be ploughed into new operations and workers. But John Engler, president of the Business Roundtable and a former Republican governor of Michigan, says there’s good reason to keep cash on corporate balance sheets.

Business needs certainty but have been getting uncertainty. The future is unclear because of talk of a tax overhaul, plus implementation of healthcare and financial reforms, and challenges to them on Capitol Hill and in court.

“Most every business in most every sector really does crave certainty and predictability,” Engler told The Hill. “I think businesses are concluding, we need to keep more cash on balance sheets. This is a pretty tough recession the world went through in 2008, 2009.”

Falling home prices are another depressing factor. CoreLogic found national home prices fell by 6.7 percent in February, the seventh month they have tumbled.

Sen. Bob Casey Jr. (D-Pa.), who represents a pivotal state in the 2012 race where the unemployment rate is lower than the national average, said Congress and the president need to focus like a laser on jobs if they care about their own political futures and the nation’s continued strength.

“It’s got to be the central priority of not just everyone running, but everyone serving,” he said.

Bernie Becker contributed to this story.